Hyderabad: Hello Curry, a quick service restaurant chain (QSR) specializing in Indian cuisine, is in advanced talks with two venture capital firms to raise ₹ 50-60 crore as it expands into newer geographies and evaluates acquisition opportunities.
Raju Bhupati, director of Red Sprout Foods Pvt. Ltd, the holding company of Hello Curry, declined to name the investors, but said the two had food businesses in their portfolio.
Bhupati expects to close the round over the next 2-3 months.
Sri Capital, floated by technology entrepreneur Sashi Reddi, might participate in the round, Bhupati said, although there is no confirmation from Reddi yet.
Reddi, who sold independent testing services company AppLabs Technologies Pvt. Ltd to Computer Sciences Corp. in 2011, invested ₹ 3 crore in seed round in April 2014.
The Hyderabad-based company on Tuesday acquired Paratha Post, a competing home delivery firm gaining significant traction in the local market. The final contours of the cash and stock deal are being worked out, and one of Paratha Post’s founders, Mukesh Lamba will join the senior management of Hello Curry.
Lamba will oversee Hello Curry’s expansion in the National Capital Region (NCR) and directly report to Bhupati, Hello Curry’s chief executive officer.
“For Hello Curry to become a national player, we need to look for good acquisitions. Paratha Post comes at the right spot," Bhupati said. “The acquisition brings great synergy between both the organisations and will significantly contribute towards Hello Curry’s aggressive growth plans."
Paratha Post will continue to operate as a separate brand for some time before being merged with Hello Curry. The product range and customer mix of the two brands have significant overlaps and Paratha Post will add 55 varieties of standardized parathas to Hello Curry’s menu.
Paratha Post was started by two Indian Institute of Management-Lucknow graduates, who opened the food delivery service specializing in parathas and curries in Hyderabad, after working for more than seven years in information technology services firms. Over the past 18 months, it sold 300,000 parathas in 60,000 delivery transactions, clocking revenue of ₹ 1 crore when the deal was sealed. The venture was profitable within three months, Lamba said.
Hello Curry plans to open three outlets in the national capital region by June. The quick service restaurant chain has five outlets in Hyderabad and will add three more in the next few months. In Bengaluru, where it opened two outlets recently, Hello Curry will add three units in three months, Bhupati said.
An outlet typically takes three months to break even, although, at a corporate level, Hello Curry is yet to turn in a profit, according to Bhupati.
The company is also in initial talks to take over a Mumbai-based food chain. The acquisition, if it materializes, will enable Hello Curry to open outlets in that city.
“We will continue to do acquisitions going forward," Bhupathi said. “Inorganic growth is really important to really expand across markets."